12/5/2014
By Jennifer Coombs

Nonfarm payroll jobs jumped 321,000 after gaining 243,000 in October, while analysts were expecting a 230,000 rise; the November boost topped the highest forecast for 275,000. September and October gains were revised up notably by a net 44,000 jobs. The unemployment rate held steady at 5.8% which was in-line with expectations. Most notably, average hourly earnings jumped 0.4% in November after edging up 0.1% percent the month before and well above the expectation for a 0.2% rise. Real wage growth is imperative for economic growth, and this coupled with lower gas prices should definitely help the average American. 

The U.S. trade gap narrowed to a disappointing $43.4 billion in October from a revised $43.6 billion in September, and came in short of analyst expectations who expected the gap to narrow to $41 billion. US exports were up 1.2% after sliding 1.8% in the month before, while imports added 0.9% after recording no change in the month prior. The October petroleum and gasoline goods trade gap was at $15.2 billion, which was up from $14.0 billion in September. Petroleum imports were down 0.6% while exports declined by 11.1%. Without a doubt, the changes in petroleum prices are reflective of the recent drop in crude oil prices. The decline of the goods and services deficit is reflective of a decrease in the goods deficit of less than $100 million to $62.7 billion and an increase in the services surplus of $100 million to $19.2 billion. The deficit in goods and services increased, by 5.1% year-to-date, versus the same time-frame in 2013.

Lower oil prices also affected US factory orders in October which surprised somewhat on the downside, but with weakness coming from nondurables. Factory orders declined in the US by 0.7% in October following a decline of 0.5% in September. Excluding the super-pricy orders (like transportation) the orders declined by 1.4% in October after experiencing no change in September. The durables component increased by 0.3% compared to the analyst estimate of 0.4% and the decline of 0.7% in September. Nondurables orders fell by 1.5% in October, after a 0.2% dip the month before. Shipments were down in October, but again, weakness was mainly in the nondurables category. Shipments fell 0.8% after a 0.1% increase in September. Inventory levels remain in balance, increased by 0.1% in October after a 0.2% gain in September. Manufacturing remains at a low level, but it’s on a positive trajectory after price effects are taken into account, plus the latest jobs report shows some optimism in manufacturing as well.

Jennifer Coombs
Wall Street Strategies

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